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July 2012

Now that a number of authorities are up and running with CIL, developers and their professional advisers are looking closely at the wording of the CIL Regulations and we are beginning to see the practical effects of how these are drafted.

We have recently spent some time focusing on how the 'existing building' off-set provisions in Reg 40 work, and were interested to see an EGi article yesterday, quoting concerns about this from the property industry.

In brief, the provisions in Reg 40 state that if there is an existing building on the development site which has been occupied - in part at least - for acontinuous period of at least 6 months in the 12 months preceding the grant of consent (or final approval of all reserved matters), and either that building is to be demolished as part of the new development or will be retained and form part of it, the area of development chargeable to CIL will be reduced by the gross internal area of that existing building.

This appears to be helpful on a first reading, but developers are concerned that it does not go far enough: in the case of empty buildings (ie those which do not satisfy the 6 month occupied test) will mean that CIL is payable in relation to the floorspace of the entire building, rather than just the floorspace of any minor extensions.

The difference in the figures could be hugely costly, and could pose a real threat to regeneration projects.

It would be well worth property professionals getting to grips with Reg 40 at an early stage, to avoid nasty surprises further down the line.

Largely as a result of a recent case in the EU Court of Justice (Inter- Environnement Bruxelles ASBL v Region de Bruxelles-Capitale), DCLG is now formally following the Strategic Environmental Assessment (SEA) Regulations and is undertaking a formal consultation on the revocation of regional strategies. The exercise undertaken last year, which was consulted on in late 2011/ early 2012, was "voluntary" (DCLG not accepting then that revocation was caught by the SEA Regulations).

Here is the link to the consultation in respect of the East of England Plan (plus saved structure plan policies). This is the only consultation I could find on the DCLG website today but i assume they are all being posted now. Not surprisingly there is little difference in the conclusions. But they must be keen to get on with the exercise, to be kicking off this week with a consultation ending on 20 September!

If you are looking for our briefing on Growing Places Funding and found a blank page when following the link in the blog, please try again by clicking here and accept our apologies for the earlier technical glitch.

Forward funding infrastructure is the key to unlocking many stalled sites at present. We are seeing instances of applications being made to local enterprise partnerships (LEPs) for Growing Places Funding for loans to facilitate these works. There are state aid issues, which require careful consideration and may determine whether the loan is made to the developer direct, or to the local planning authority and recouped through a section 106 payment obligation.

We will be interested to hear from anyone involved with such applications and to learn of the varying approaches applied - whether these are site specific or led by local authority or LEP requirements.

The Department for Transport has published a consultation on changes to the decision-making process for stopping up and diversion orders for public highways. Under the current system, the target time-frame for making a stopping up or diversion order is 13 weeks. Since a developer can only make the application after securing planning permission, developments currently face a 13 week delay if they need to stop up or divert a highway.

The consultation makes proposals to speed up and simplify the application process. These include allowing concurrent submission of both the planning application and the stopping-up or diversion application; devolving order-making powers to the highway authority; devolving order-making powers to the local planning authority, with the highway authority acting as a statutory consultee; and introducing a statutory time limit for negotiating withdrawal of objections to applications.

An integrated system for considering planning applications and stopping up or diversion applications together has been rejected on the basis that the differing aims of each system require a difference in approach and procedure.

The consultation also asks whether local authorities could recover a fee from the developer for the costs of determining applications. From a developer’s standpoint, this new cost will hopefully be offset by the benefit of gaining earlier certainty on a stopping up or diversion order, the reduction of costs associated with current delays, and the economic rewards from earlier delivery of a development.

Just as Christine was posting her blog yesterday on the Garden Cities vision, DCLG were posting on their website 2 more Secretary of State decision letters allowing 3 appeals for housing led schemes. These were appeals by Peel Investments (where the Inspector recommended refusal) at Worsley, Manchester and by Comparo and Welbeck Strategic Land for 2 schemes at Bishops Cleeve in Gloucestershire. In all these appeals, the part played by NPPF, against a background of housing under-supply is apparent. All 3 appeal sites were in countryside and although the localism voice was heard and respected, it was not followed. It will be interesting to see if a few more decisions like these will come through before the summer break.

The recently published TCPA report “creating garden cities and suburbs today” sets out a range of policies, practices, partnerships and model approaches. Its vision is for “beautiful places which offer a wide range of employment opportunities… a complete mix of housing types… zero carbon-design, sustainable transport, vibrant parks and local food sourcing” (see our recent blog) The report applauds the reference to garden cities in the NPPF (para. 52) – the first time mention has been made in national planning policy in forty years.

In March 2012, David Cameron announced a consultation “later this year” on the application of the principles of garden cities to areas with high potential growth. Whilst this consultation has not yet been launched, CLG are reported (at a recent TCPA conference) to be referring to a forthcoming garden cities prospectus. We wonder whether this will, in fact, be a part of a prospectus announced in the Housing Strategy, for “planned large scale developments”. At the same conference, Ashford Borough Council and Oxford City Council both gave examples of major urban extensions in their areas, which could take the form of garden cities. So there is some momentum already gathering.

Delivering the vision will require comprehensive planning and community structures that (to quote the report) “put people at the heart of new communities and give them ownership of community assets”. “Locally planned and delivered” will remain the Government’s focus - the challenge of seeing the vision as a reality lies with the coming together of local planning authorities, their local communities, land owners and developers bringing forward suitable sites.

A number of people have asked me about differential rates in light of the decision, by Borough of Poole to scrap plans to charge different CIL rates for large retail development than for small. That decision followed representations by a major retailer drawing attention to the wording of the Regulations which refers to differential rates "by reference to ...use" - the argument being that the size of the retail unit does not affect use.

It will be interesting to see how this pans out. I hear there are plans to introduce amendments to the regulations, but how these will come through is not clear. There are state aid issues in all of this, and it is recognised that any cut off point in terms of the step up to a higher rate will often be quite arbitrary. Also it is not only retail development which is likely to be affected - some councils are bringing forward charging schedules which show a higher rate for low rise, or student residential.

In both cases (large retail vs small, high rise vs low, student resi vs family) there seems to be agreement that there are differences in viability - but translating that into a difference in use is the problem. Of course a number of charging schedules have been adopted with these differential rates in them - and others are still coming through. So what happens when a large retailer is asked to pay at the higher rate? Can he claim the charge is ultra vires and refuse to pay? If so, can the small retailer do the same?

Interesting times ahead for CIL I suspect and that's before we hear back on the consultation around including affordable housing within CIL!

An interesting case came before the High Court last week, highlighting the (not quite) age-old question of the interplay between development plan policies and material considerations which could outweigh them in the determination of a planning application (pursuant to s38(6) PCPA 2004).

The case referred to a proposed development, in Islington, of some light industrial floorspace to allow the expansion of an established local business, together with 15 dwellings, and some 575 rooms of student accommodation. It was agreed by the parties that the business was a significant employer of local residents and was one which the Council was itself keen to retain in the Borough.

At the time of the hearing into the appeal against the Council's refusal of consent, the Council's Core Strategy was yet to be adopted, but this was anticipated to be done (and in fact was done) just 2 days later - therefore consideration of it was a significant part of the appeal hearing and by the time the Inspector made her decision the policies were fully adopted. As it is the development plan which is in place at the time of making the decision which should be taken into account, the Inspector was right to refer to that in her report.

There were clear policies in the Core Strategy which promoted 'conventional homes and employment use', but expressly did not support student housing, save in two defined areas (and this was not one of them), on the basis that the Borough had been exceding its student accommodation targets for some time. However, the decision maker of course has to consider all other material considerations and decide what weight to attach to them.

The Court found here that the protection of the important local business and employer was such a consideration. It had been shown at the appeal hearing (although the evidence was in question in the High Court challenge) that the employment development would not have been viable without the student accommodation. The Inspector had noted that alternative proposals, including the provision of conventional housing, had been explored.

The Court concluded that the Inspector had been entitled to find that the overall advantage of the proposed development to the local business and the regeneration of the area outweighed the policy restrictions in the development plan, when read as a whole.